Nanoco share price falls 73% after losing key US customer
The tech company's stock plummets after a US client decides not to renew a contract.
Nanoco share price tumbled after a key unnamed US customer decided to end a contract extension with the nanomaterials manufacturer.
Nanoco struggles after losing pivotal customer
Nanoco is a tech corporation that develops and manufactures quantum dots. The semiconductor particles are often used in manufacturing TV displays. In January 2019, Nanoco revealed that it extended a contract with a US client until December 2019 to develop materials at Nanoco’s facility. The US customer decided not to renew the contract beyond the end of the year.
‘The US customer has now informed Nanoco that the project will not continue beyond the current contract, for reasons wholly unconnected to the performance of our materials and our service delivery,' said Nanoco.
After the corporation announced the end of the contract extension with the anonymous US company, Nanoco share price had the worst one-day decline in its history. As IG analyst, Jeremy Naylor, noted, the company’s worth has dropped to £24 million.
Can Nanoco share price survive loss of large US client?
When Nanoco renewed the contract with the US company in January, Nanoco expected revenue to double by the end of July. With the loss of the US customer, Naylor says it will be hard for Nanoco to increase profits when it ‘doesn’t have much of a business outside of this particular brand of technology [of manufacturing quantum dots]'. Despite the loss of the US client, Nanoco still had an optimistic outlook.
‘Other potential uses for the technology are being explored with a range of customers, including the US customer. The group also continues to work on a number of opportunities in a range of sectors including display,’ said Nanoco.
‘The group still expects to deliver a cash breakeven position, as previously announced, for the twelve months ending December 2019 and to have a cash balance of approximately £6 million at that time,’ added Nanoco.
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